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Tuesday, July 3, 2012

EU rules that digitally-distributed software can be resold as 'used'

The European Court of Justice has
declared that digitally distributed software can be resold as
"used", just like a physical product.
This ruling stems from a spat between
Oracle and UsedSoft -- a German business that resells product
licenses for Oracle software, after they have been bought from
Oracle customers.
The software maker objected. It wasn't getting a cut of the
profits, and had to provide these second-hand customers with the
files, updates and patches for its programs. It took its case to
the German courts, hoping to stop UsedSoft from carrying out its
scheme.
The Federal Court of Justice in Germany then asked Europe's
highest court to give a ruling on the legal protection of digital
software.
Much to Oracle's chagrin, the EU says that a copyright holder
loses all distribution rights the moment it sells a copy of its
software to the customer -- whether it's on a physical medium like
a DVD, or distributed through downloads from a website.
"Therefore," the court explains, "even if the licence agreement
prohibits a further transfer, the rightholder can no longer oppose
the resale of that copy." The business must also provide patches
and updates to the new customer.
There are some caveats, of course. If a customer does decide to
sell on his digital copy, he must "make the copy downloaded onto
his own computer unusable at the time of resale." If you continue
to use the software after selling it you're now reproducing -- not
distributing -- it, which very likely goes against your terms of
service.
To avoid such reproduction, the
ruling states that a copyright holder, like Oracle, is entitled
to "ensure by all technical means at his disposal that the copy is
made unusable." That means DRM.
In the case of Oracle, where businesses can buy licenses in
bulk, you're not allowed to sell off the ones you don't need
anymore. You do not get authorisation to divide up your license and
resell only one part of it.
This isn't the end of the case for Oracle. The German court
still needs to make its ruling -- but it's likely that the European
Court of Justice's ruling will dictate that final judgement.
"The door for the trade in used software has been pushed wide
open throughout the European Union," UsedSoft said in a statement,
provided to Deutsche Welle. The company said this ruling
welcomed "perfect legal safety on the market."
What's not clear is what this means for customers on digital
distribution services like Steam,
iTunes and Xbox Live, where there is no built-in functionality
to transfer games, apps and files to new users. Whether Apple and
Valve and the like must implement such features in the EU, remains
to be seen.